California Has a Staggering Amount of Pension Debt | Hacker News Reader

California Has a Staggering Amount of Pension Debt

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17 pointsHillaryBriss18 comments

When you have CHP officers getting paid $110,000 a year, it's no wonder.

http://transparentcalifornia.com/salaries/search/?q=highway+...

If I can make $150k writing JS in Los Angeles then CHP deserves at least $110k a year.

You're equating risk and skill. I don't disagree with it, but the problem is the societal forces that compensate the CHP don't compensate the soldiers in Afghanistan who take similar, if not greater, risks. Why is that?

Why is it the opposite on Wall Street? Higher risk equates to a bigger return.

Because we value money more than lives.

My ability to build an app that generates revenue is more valuable than CHPatrolman ability to save a life.

It's actually a quarter million a year in total benefits.

Can they elect to receive a quarter million cash dollars in lieu of benefits? If not, such benefits are not really part of their compensation any more than their uniforms or cars.

I guess it depends on what constitutes "other pay." There's an officer with $70,000 worth of Other Pay. But overtime pay is definitely paid in cash.

But if you want to quibble about $70,000 in pension and healthcare payments, that still leaves $160-180k a year in direct compensation.

Tons of countries has hidden debt as they retirement is pay as you go system and at the same time the population is aging.

I spent many years as a passionate and vocal fiscal conservative. I stayed up many late nights arguing for relatively balanced budgets and smart (generationally fair) budgets. Over time I realized it was likely hopeless, since words (even the truth) can't compete with the tangible materialism of bread and circuses; so now I embrace ''Accelerationism''. We will eventually hit the top of the Laffer Curve, the max debt-to-GDP debt load, and all related fiscal ceilings and cliffs. Let's just hurry up (and try to spend the remaining debt space in the best ways possible) and get it over with so we can have more meaningful debates about how to structure society.

https://en.wikipedia.org/wiki/Accelerationism

You're overly US-centric I think. The US can run unaccountable deficits due to reserve currency status, huge capital availability etc. There are still advanced countries which are fiscally conservative.

It's also difficult to compare US states -- which can't print money, with the U.S. debt level (relatively acceptable in the developed world). Perhaps a better comparison is Illinois and California (the highest poverty rate in the nation, when taking into account cost of living) with eurozone countries like Italy and Greece, which cannot devalue their currency to remain competitive. Yet, unlike the Eurozone, there will be more significant federal distributions to these states which racked up debt and receiving more federal aid including Medicaid / ACA grants, educational assistance, and food stamps. But we will continue to experience what is happening in parts of Michigan and Illinois, where states and cities have to make material sacrifices to pay down the debt.

California also makes material sacrifices to pay down the pension debt. Consider the condition of the roads (especially in Los Angeles) and the budget problems facing the UC and Cal State University systems.

Which advanced countries do you consider to be fiscally conservative?

Switzerland and Norway would come to mind. Norway has a large sovereign wealth fund created just for the purpose of keeping up an income stream once North Sea oil runs out. Germany and Japan are possibly the only ones close to the US's size and scale in population (3-4x smaller).

Wouldn't the EU as a whole (led by Britain, Germany, and France) be similar to the US? EU + US + Japan = the vast majority of the first world. Norway has done well for themselves but it's a tiny country with massive natural resources and a stable, homogeneous population; it's hard to draw conclusions from their experience that are applicable to the rest of the world.

Yes, but I wouldn't consider France and the UK necessarily fiscally conservative overall. Moreso than the US - think QE2 and QE3 vs the UK's "age of austerity" under David Cameron through 2015, well after the start of the Great Recession.

Is $77,000 a lot though? It's much less than Alaska's $113,000 and less than the average of the top 5 states on the list. Accounting for the net-present value drops the obligation quite a bit, most of these costs will not bear out for several decades.

I think it's more important to look at the growth of this obligation over time. Is it going down as more people move to the state? And how is it doing relative to tax revenues?

Should add to the California state constitution that whenever there is a budget shortfall directly related to a thing they voted for, they or their estate including portions already inherited has to pay for it, up to the entire value of the estate.

Because the problem is these politicians know that a problem 20 years out is not their problem and they will never be called to account for their short sighted decisions.

Unions are equally culpable. Their negotiators and leadership should be under the same penalties as the politicians. They ask for concessions that can never be financially stable, essentially guaranteeing that the entire future budget will have to go to pay for the current union's retirement, screwing their future members.

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